Armenian prime minister's reform drive likely to be short-lived

Karen Karapetyan, a former Gazprom executive, has moved to tackle longstanding problems such as corruption and tax evasion.

By Carmen Valache in LundOctober 28, 2016

Armenia's new prime minister, Karen Karapetyan, has started his tenure with a bang. In little over a month in office, the former Gazprom executive has moved to tackle longstanding and widespread problems such as corruption, tax evasion and even the proliferation of mini-hydropower plants built with questionable environmental due diligence over the last decade.

Karapetyan is a political outsider who had lived in Russia, where his billionaire brother owns a real estate empire, for many years before taking the position. But for now, he has the backing of the ruling party. Despite drawing criticism from some politicians, such as former economy minister Artsvik Minasyan, for his plans, the technocrat secured the parliament's approval for his new plan to fight corruption and tax evasion on October 21, a step that amounted to a vote of confidence in his government.

But while his drive to reform the government - and the country - might be in earnest, it will likely amount to no more than window dressing, political analysts argue. For his progressive policies will serve only as populist bait to ensure the ruling party's victory at the polls in the parliamentary election next spring despite growing dissatisfaction with the government.

The issues that Karapetyan has chosen to tackle resonate with Armenians. They are issues for which the population and opposition have criticised the administration of President Serzh Sargsyan and his ruling Republican Party (HHK) for years, to no avail.

His choice of agenda was motivated by his desire for the country to be "fairer, safer and richer", he said in a televised interview on October 22. "If I can be of service, I am prepared to do everything in my power," he added.

But his ostensibly noble motivations clash with the likely opportunistic reasons why he was appointed in the first place. For opportunism is the only likely explanation why Sargsyan would choose to appoint a reformist prime minister after dismissing his predecessor in September, a mere eight months before the country is scheduled to hold parliamentary elections that will effectively transfer power from the office of the president to the government.

In any case, the real test of Yerevan's commitment to reforms will come after the elections, depending on whether HHK retains Karapetyan as head of government once the party will effectively take over the executive power in the state.

At the moment, the political establishment needs to back the reformist prime minister, because it needs to appear to solve problems that are unpopular with the electorate. But once it finds itself holding the reins of power again come April, HHK is likely to renege on the idealistic technocrat.

Although he has so far declined to comment on the topic, Sargsyan might be eyeing the position of PM with extended powers for himself and needs Karapetyan to clean up his administration's image to pave his way to the new position.

Damned if he succeeds, damned if he doesn't

Karapetyan was appointed at a delicate time, a mere two months after a hostage crisis in the capital of Yerevan prompted street protests over the administration's mishandling of the economy and the territorial conflict with neighbouring Azerbaijan over the breakaway region of Nagorno-Karabakh. Demonstrators called for Sargsyan to step down, but he chose instead to dismiss scores of government officials, including former Prime Minister Hovik Abrahamyan, and to appoint a sucessor who would at least appear to tackle the issues that made Armenians dissatisfied with the government.

But Karapetyan's position is weakened by several factors, Richard Giragosian, director of the Yerevan-based think tank Regional Studies Centre, explains in an email to bne IntelliNews. Firstly, the timing of his appointment was bad. "Given the serious lack of public trust and confidence in the Armenian government, which has only worsened in the wake of the April fighting over Nagorno-Karabakh and the July hostage standoff, the burden to regain and restore a more positive image of the government in public opinion is an especially daunting challenge," he writes.

Secondly, by picking corruption as his main battle he risks losing the war. Between two postings at Russian gas giant Gazprom, Karapetyan was also a mayor of Yerevan for 10 months in 2010-2011. His brief mandate ended when he stepped down from his position amidst widespread protests against a ban on street vending in the capital city, a policy that disproportionately favoured wealthy oligarchs and their retail chains. His weak track record of standing up to the country's infamous oligarchs is a poor foundation to build on, now that he is going after their vested interests again.

"Karapetyan is in a lose-lose position, whereby if he makes good on his promises [to fight corruption]...he will most likely lose in a battle with powerful enemies. And with no political power base of his own, and impeded by a questionable commitment or backing by the president, he may find himself too weak and too exposed to win the battle against corruption," Giragosian posits. "In the other scenario, he may also lose if he fails to deliver on his promises of reform," he adds.

Giragosian is doubtful of the prime minister's political future in Armenia. Nevertheless, he concedes that Karapetyan may be "the most appropriate transitional figure, as the country moves toward watershed parliamentary elections in April". Nevertheless, he will likely become "as much a political scapegoat as his predecessor, and is likely to return to Moscow once his utility has expired, with his previous tenure as Yerevan mayor as a political precedent," Giragosian concludes.

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